Calculated Risk: July Employment Preview

by Calculated Risk on 7/31/2025 05:00:00 PM

On Friday at 8:30 AM ET, the BLS will release the employment report for July. The consensus is for 118,000 jobs added, and for the unemployment rate to increase to 4.2%. There were 147,000 jobs added in June, and the unemployment rate was at 4.1%.

Important: As I noted earlier, the large increase in seasonally adjusted education hiring in June was probably a seasonal adjustment issue. There will likely be payback in the July report, and it is possible we will see a seasonally adjusted decline in state and local education of 50 thousand or more for July.

From Goldman Sachs:

We forecast a 100k increase in payrolls in July. Big data indicators point to a rebound in private sector job growth, though to a still soft pace. … We expect the unemployment rate to rebound to 4.2% based on the signal from other measures of labor market slack such as continuing jobless claims.
emphasis added

From BofA:

July NFP are likely to rise by 60k. State & local gov’t jobs should drop after spiking in June. Meanwhile, we think private payrolls will pick up to +85k because of the ongoing decline in initial claims. It is probably too early to see a big impact from immigration policy. But high continuing claims and unfavorable seasonals could be headwinds. … The u-rate should rise to a still-benign 4.2%.

• ADP Report: The ADP employment report showed 104,000 private sector jobs were added in July.  This was above consensus forecasts and suggests BLS reported job gains at consensus expectations, however, in general, ADP hasn’t been very useful in forecasting the BLS report.

• ISM Surveys: Not available yet for July.

• Unemployment Claims: The weekly claims report showed fewer initial unemployment claims during the reference week at 230,000 in July compared to 246,000 in June.  This suggests fewer layoffs in July compared to June.